Men Fashion SME internationalization study 1/8

EAFIT University

School of Business Administration

International Business Department
MIB – SME Internationalization

Scalpers Case
Men Fashion SME internationalization study

Individual Essay
Presented to
Prof. Esteban Mancuso
by
Alexander Zehnder
May 5th 2011
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1 Abstract
The objective of this essay is to give an overview of the internationalization processes in
the fashion industry. It shows the feasibility for SME fashion manufacturer to
internationalize its business as well as an entry strategy proposal and recommendations
for Scalpers shareholders to expand its operations internationally. The essay covers the
business model and entry strategy as well as it shows statistical information about the
global importers and exporters in the fashion industry. Geographical proximity and social
networking are also an important point that will be discussed within this paper. To
provide consistent recommendations, this essay takes as reference the fashion brand
ZARA from Spain which has internationalized very successfully into 59 Countries so far.
(Lopez, 2009)
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2 Table of Contents

1 ABSTRACT ...................................................................................................................................................... 2

2 TABLE OF CONTENTS...................................................................................................................................... 3

3 LIST OF FIGURES............................................................................................................................................. 4

4 LIST OF TABLES .............................................................................................................................................. 4

5 INDEX ............................................................................................................................................................ 4

6 INTRODUCTION ............................................................................................................................................. 4

6.1 COMPANY OVERVIEW ............................................................................................................................................ 4

6.2 MISSION ............................................................................................................................................................. 5
6.3 PRODUCTS ........................................................................................................................................................... 5

7 GLOBAL CLOTHING INDUSTRY ....................................................................................................................... 6

7.1.1 International Strategy............................................................................................................................. 6

8 CONCLUSION ................................................................................................................................................. 6

9 RECOMMENDATIONS .................................................................................................................................... 6

10 BIBLIOGRAPHY............................................................................................................................................... 7
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3 List of Figures
Figure 1: Age dependency ration (FSO, 2010) ................. Error! Bookmark not defined.
Figure 2: Hofstede Radar Diagram (Hofstede, 2009) ....... Error! Bookmark not defined.
Figure 3: Globe Results .................................................... Error! Bookmark not defined.
Figure 4: Globe Colombian SHOULD & Switzerland IS ... Error! Bookmark not defined.
Figure 5: Strategy Formulation Process (Fatehi, 2008) .... Error! Bookmark not defined.
Figure 6: Responsibility diagram ...................................... Error! Bookmark not defined.
Figure 7: ITO Value Chain Diagram ................................................................................. 6

4 List of Tables
Table 1: Trompenaars Comparison (Stähli, 2003)........... Error! Bookmark not defined.
Table 2: Globe Results based on (Chhokar, 2007) .......... Error! Bookmark not defined.

5 Index
EMP Total Cost of Ownership .................... 7
Export Marketing Plan ...................... 7 WTO
TCO World Trade Organization ................. 6

6 Introduction
The first fashion stores “ScalperS” were opened by Rafael Medina Abascal, Álvaro
Muñoz Escassi and Rosauro Baro in December 2007 in Sevilla and Madrid, Spain. The
place is designed for men with classic but good taste in fashion. Rafael Medina started
creating ties for business with such great success, that he decided to go for more. As
the company is growing, the brand becomes visible in Mexico, Colombia, Chile and
Argentine due to publications in men fashion magazines such as GQ and ESQUIRE.
Time has come to think of internationalization of this SME and figure out the best way to
do it.

6.1 Company Overview

“Scalpers” has its origin in a small studio set up by a group of friends to sell exclusive
ties made with the finest materials. The company grew and thru their origins and
expanded the service offering by developing a custom tailoring and shirting fabrics
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always using the most prestigious houses in the world. Given the success of the small
studio and unique ties, they decided to extend the bid opening a shop a year later and
following the first collection PRET A PORTER. One of the emblems of the signature
Scalpers are the known and prestigious slippers. Currently the group is now part of
Black Label that sells products in their stores Scalpers Madrid, Seville and Bilbao
Alicante soon in Pamplona, Gijon, Santander and Valencia. (Facebook)

6.2 Mission
The Mission is providing a Style that is reflected equally in both the most classic line as
the most casual. Based on the success of their suits, shirts and ties, now they make
jerseys, polo shirts, shoes, trousers and slippers. The faithfully personal and
recognizable style aimed at men for whom it is essential to present an impeccable image
at all times of day and in every field, social or professional. (Facebook)

6.3 Products
The offerings were extended by developing an excellent service in tailoring that allows
the garments, perfectly adapted to the client's body. In the manufacturing of these suits
and shirts, Scalpers always follow the canons of the Spanish sartorial tradition,
presenting all the clothes patterns marked and well-defined cuts in order to achieve a
streamlined and proportionate silhouette. For its preparation we use carefully selected
fabrics from the world's most prestigious homes with an eye for details of clothing. With
all this got impeccably cut clothes that combine tradition and style, without losing a fresh
approach to elegance. (Facebook)
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7 Global Clothing industry

Before working on a plan how to expand business abroad, a clear view of the global
industry is needed. Even though the clothing industry is very mature, its
internationalization has been affected largely by technology and logistic from resource
gathering until manufacturing and retail. The internationalization is becoming
increasingly important given the tendency of a “borderless world”. (Anderson, 1998)

7.1 The rules have changed

From January 2005, all the import quotas in textile and clothing industry have been
removed providing unrestricted access of all members of the WTO to the European,
American and Canadian markets, which is considered the key driving force of the
clothing sector development. (Keenan, 2005)

7.2 Internationalization of Retailing

Customers and Retailers are highly affected by international trade either they participate
actively or passively. For SME to benefit from this, their way of making business must
change from a domestic approach to an international concept. (Alexanders, 2000)

Fashion retailing internationalization is proven to be one of the most successful among

international retailers due to:

 Requiring limited management set up costs and capital based on the small format
 Ease of entry and exit compared to manufacturing
 Internationalization of single brand
 Franchising is more suited in this industry than any other non-food formats
 Economics of Replication

7.2.1 International Strategy

8 Conclusion

9 Recommendations

Figure 1: ITO Value Chain Diagram

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 A very detailed EMP must be developed first to define target market segments,
human resource requirements on both sides and to develop an accurate budget
for the expansion project, estimate ROI and TCO.

10 Bibliography
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